Ukraine MinFin schedules final debt talks for Aug. 12 in California

Ukraine’s Ministry of Finance has agreed to meet with the ad hoc creditors committee on Aug. 12 in San Francisco, according to its Aug. 7 press release. The headquarters of Ukraine’s biggest creditor, Franklin Templeton, is located there.

This meeting is “the final opportunity to reach a full agreement” on the debt operation, the ministry stated. “Failure to reach an agreement at the sovereign level next week would force Ukraine to implement alternative options for financing its IMF-supported program,” the ministry said in the press release, reiterating its Aug. 6 threat.

Alexander Paraschiy: The Aug. 7 statement is some relief compared to the prior day’s release, in which MinFin set Aug. 11 as the ultimate deadline and threatened “alternative options” if no deal was reached “early” in the week. In any case, the creditors committee will decide by Wednesday whether to agree on some significant haircut on Ukraine’s debt, or to reject it and face a risk to trigger the introduction of a debt repayment moratorium by Ukraine. Our outlook today is that the creditors and the government will find common ground on Wednesday, with a haircut of 10-15%. An alternative scenario is a debt moratorium, which would have unclear implications for both parties.